Netflix Cuts Rates, Anticipates Digital Price Wars


In a reaction to what appears to be a digital video price battle, Netflix is launching a bottom-line streaming-only video monthly package at $7.99. 

Recently, Hulu Plus, the new product from Hulu, decided to lower its new, all-inclusive service to $7.99 from its pre-planned $8.99 "preview" of the service.

Netflix and Hulu Plus are not direct competitors. Netflix offers a mix of theatrical movies and some TV series. Hulu Plus is virtually all TV shows -- full, complete seasons of current and former series from ABC, NBC, Fox and others. The regular Hulu service offers current episodes of TV shows and five most recent episodes.

The Neflix announcement alludes to some new competition, noting in a release that "with its members now watching more content streamed over the Internet than on discs delivered by mail," the company is starting up the new subscription plan.



The new Netflix plan allows members to instantly watch unlimited movies and TV episodes streamed from Netflix to TVs and computers. It is available to both new and existing members.

At the same time, Netflix says it is increasing the price of its existing $8.99 package to $9.99. This package includes unlimited movies and TV shows streamed over the Internet and unlimited DVDs delivered by mail, with one DVD mailing at a time.

Recently, Netflix has done deals with NBC Universal, Warner Bros., 20th Century Fox, Epix, Relativity Media and Nu Image/Millennium Films.

Reed Hastings, Netflix co-founder and chief executive officer, stated: "We are now primarily a streaming video company delivering a wide selection of TV shows and films over the Internet. ... Today's action reflects the tremendous customer value we've injected into streaming from Netflix."

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